LaSalle Hotel Properties (NYSE: LHO) today announced results for
the quarter and year ended December 31, 2015. The Company’s results
include the following:
Fourth Quarter Full Year
2015 2014 % Var. 2015 2014 %
Var. ($'s in millions except per share/unit data) RevPAR
$ 184.09 $ 184.52 -0.2% $ 193.95 $ 191.22 1.4% Hotel EBITDA
Margin(1) 31.6% 31.3% 33.5% 32.3% Hotel EBITDA Margin Growth(1) 30
bps 118 bps Total Revenue $ 294.7 $ 269.8 9.2% $ 1,216.6 $
1,109.8 9.6% EBITDA(1, 2) $ 85.3 $ 79.4 7.4% $ 370.6 $ 429.0 -13.6%
Adjusted EBITDA(1) $ 89.5 $ 80.5 11.2% $ 386.5 $ 343.8 12.4% FFO(1)
$ 69.3 $ 61.9 12.0% $ 304.3 $ 259.9 17.1% Adjusted FFO(1) $ 74.4 $
63.0 18.1% $ 321.1 $ 270.5 18.7% FFO per diluted share/unit(1) $
0.61 $ 0.58 5.2% $ 2.69 $ 2.48 8.5% Adjusted FFO per diluted
share/unit(1) $ 0.66 $ 0.59 11.9% $ 2.83 $ 2.58 9.7% Net income
attributable to common shareholders (2) $ 23.5 $ 22.8 3.1% $ 123.4
$ 197.6 -37.6% Net income attributable to common shareholders per
diluted share (2) $ 0.21 $ 0.21 0.0% $ 1.09 $ 1.88 -42.0%
(1) See tables later in press release, which list adjustments
that reconcile net income attributable to common shareholders to
earnings before interest, taxes, depreciation and amortization
(“EBITDA”), adjusted EBITDA, funds from operations attributable to
common shareholders and unitholders (“FFO”), FFO per share/unit,
adjusted FFO, adjusted FFO per share/unit and pro forma hotel
EBITDA. EBITDA, adjusted EBITDA, FFO, FFO per share/unit, adjusted
FFO, adjusted FFO per share/unit and hotel EBITDA are non-GAAP
financial measures. See further discussion of these non-GAAP
measures and reconciliations to net income later in this press
release.
(2) Full year 2014 EBITDA and net income include $93.2 million
of disposition gains from the 2014 sales of the Hilton Alexandria
Old Town and Hotel Viking.
“The Company achieved all-time record performance in ADR,
RevPAR, and hotel EBITDA margin, and further enhanced an already
strong balance sheet during 2015,” said Michael D. Barnello,
President and Chief Executive Officer of LaSalle Hotel Properties.
“We are proud of each of these accomplishments; and with hotel
EBITDA growing at a rate three times the magnitude of RevPAR in
2015, we were able to again demonstrate the efficiency of our
operating model and drive another year of strong cash flow growth
for the Company.”
Operating and Per Share Results
In order to demonstrate the stabilized run rate of the Company’s
operations, the following information is presented excluding the
impact of the union disruption at Park Central Hotel New York and
WestHouse Hotel New York (collectively “PCNY/WH”) in August,
September, and October 2015. The Company has estimated the negative
impact based on the PCNY/WH actual results for August, September,
and October 2015 versus their forecast for that period as of August
1, 2015. (For additional information regarding the union
disruption, refer to the Company’s third quarter 2015 earnings
press release.)
Fourth Quarter Results
- RevPAR: Room revenue per
available room (“RevPAR”) for the quarter ended December 31, 2015
increased 0.9 percent to $186.13, as a result of a 1.4 percent
increase in average daily rate (“ADR”) to $239.09 and a 0.6 percent
decrease in occupancy to 77.8 percent.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin for the fourth quarter increased 72
basis points from the comparable prior year period to 32.0
percent.
- Adjusted EBITDA: The Company’s
adjusted EBITDA was $91.5 million, an increase of 13.7 percent over
the fourth quarter of 2014.
- Adjusted FFO: The Company
generated fourth quarter adjusted FFO of $75.5 million, or $0.67
per diluted share/unit, compared to $63.0 million, or $0.59 per
diluted share/unit, for the comparable prior year period, a per
share/unit increase of 13.6 percent.
Full Year 2015 Results
- RevPAR: RevPAR increased 2.6
percent to $196.22, as a result of a 2.7 percent increase in ADR to
$239.97 and a 0.1 percent decrease in occupancy to 81.8 percent. In
2015, the Company achieved its highest-ever reported ADR and
RevPAR.
- Hotel EBITDA Margin: The
Company’s hotel EBITDA margin was 34.0 percent, which was its
highest-ever reported margin and represents an improvement of 165
basis points compared to 2014.
- Adjusted EBITDA: The Company’s
adjusted EBITDA was $395.7 million, an increase of 15.1 percent
over 2014.
- Adjusted FFO: The Company
generated adjusted FFO of $326.4 million, or $2.88 per diluted
share/unit, a per share/unit increase of 11.6 percent.
Investment Activity
- Hotel Acquisitions: The Company
invested $446.3 million to acquire the following two fee simple
assets:
- Park Central San Francisco for $350.0
million on January 23, 2015; and
- The Marker Waterfront Resort in Key
West, FL for $96.3 million on March 16, 2015.
- New Mezzanine Loan: On July 20,
2015, the Company provided an $80.0 million junior mezzanine loan
(the “Mezzanine Loan”) secured by equity interests in two hotels:
Shutters on the Beach and Casa Del Mar, in Santa Monica, CA. The
interest only Mezzanine Loan bears interest at a variable rate
equal to LIBOR plus 775 basis points, which translates to 8.2
percent as of February 17, 2016. The Mezzanine Loan has an initial
two-year term, with five one-year extension options. The Mezzanine
Loan is subordinate to a $235.0 million first mortgage loan and a
$90.0 million senior mezzanine loan secured by the properties that
both also have an initial two-year term, with five one-year
extension options.
- Capital Investments: The Company
invested $142.0 million of capital in its hotels throughout the
year, completing renovations at Sofitel Washington, DC Lafayette
Square, The Grafton on Sunset in West Hollywood, Hilton San Diego
Gaslamp Quarter, Villa Florence in San Francisco, Hyatt Regency
Boston Harbor, Westin Philadelphia and the first phase of the rooms
renovation at Westin Michigan Avenue in Chicago. During the year,
the Company also created 18 new rooms, including 14 rooms in San
Francisco and four rooms in San Diego, which is a significant value
enhancement to those hotels. The average development cost per room
was approximately $200,000, which is a considerable discount to
replacement cost, particularly in high barrier to entry West Coast
markets.During the quarter, the Company invested $49.9 million of
capital in its hotels. The Company commenced renovations at the
Chaminade Resort and Conference Center in Santa Cruz, Hotel Solamar
in San Diego, Hotel Amarano Burbank, Hotel Palomar, Washington, DC,
The Liberty Hotel in Boston, Lansdowne Resort in Lansdowne, VA, and
the second phase of the guestrooms at Westin Michigan Avenue in
Chicago. The Company also closed Hotel Helix in Washington, DC on
October 16, 2015, and plans to reopen the hotel in March 2016 as
the Mason & Rook Hotel, after a complete renovation of the
guestrooms, public spaces, and meeting space.During 2016, the
Company anticipates investing between $130.0 million and $170.0
million of capital in its hotels.
Balance Sheet and Capital Markets Activities
As of December 31, 2015, the Company had total outstanding debt
of $1.4 billion, including $21.0 million outstanding on its senior
unsecured credit facility. Total net debt to trailing 12 month
Corporate EBITDA (as defined in the Company’s senior unsecured
credit facility) was 3.6 times as of December 31, 2015 and its
fixed charge coverage ratio was 5.0 times. For the fourth quarter,
the Company’s weighted average interest rate was 3.1 percent. As of
December 31, 2015, the Company had $5.7 million of cash and cash
equivalents on its balance sheet and capacity of $751.4 million
available on its credit facilities.
- Mortgage Refinancing: On July
20, 2015, the Company closed on a new $225.0 million loan secured
by the Westin Copley Place. The interest rate will range from LIBOR
plus 175 basis points to LIBOR plus 200 basis points, depending on
Westin Copley Place’s net cash flow (as defined in the loan
agreement). Due to strong net cash flow at Westin Copley Place
during 2015, the interest rate dropped from LIBOR plus 200 basis
points on July 20, 2015, to LIBOR plus 175 basis points as of
December 31, 2015. Including three extension options, the loan
matures in January 2021, pursuant to certain terms and
conditions.
- Term Loan: On November 5, 2015,
the Company closed on a new $555.0 million senior unsecured term
loan, which matures in January 2021. The new term loan was swapped
to an average all-in fixed interest rate of 2.95 percent. At
closing, the Company concurrently paid off its $177.5 million
senior unsecured term loan. The Company used the remaining net
proceeds to temporarily pay off the majority of the balance on its
$750.0 million senior unsecured credit facility. In the first
quarter of 2016, the Company ultimately used $286.2 million of the
remaining net proceeds from the new term loan to repay the
mortgages on Westin Michigan Avenue, Indianapolis Marriott
Downtown, and The Roger. For more details on the three mortgage
repayments, refer to the Subsequent Events section of this press
release.
- Share Repurchase: During the
third quarter, the Company acquired 184,742 common shares through
its share repurchase program at a cost of $5.7 million. The Company
has not acquired any additional common shares since the third
quarter of 2015. The Company has $69.8 million of capacity
remaining in its share repurchase program.
Dividend
On December 15, 2015, the Company declared a fourth quarter 2015
dividend of $0.45 per common share of beneficial interest. The
dividend represents an annual run rate of $1.80 per share and a 7.5
percent yield based on the closing share price on February 17,
2016.
Subsequent Events
On January 4, 2016, the Company prepaid the mortgages on Westin
Michigan Avenue and Indianapolis Marriott Downtown, which had
remaining balances of $131.3 million and $96.1 million,
respectively. On February 11, 2016, the Company prepaid the
mortgage on The Roger, which had a remaining balance of $58.8
million. The Company did not incur any prepayment penalties
associated with these three mortgages. Pro forma for paying off the
three mortgages in 2016, the Company has $307.2 million outstanding
on its senior unsecured credit facility, which translates to $465.2
million of availability on its credit facilities. Pro forma for
paying off the mortgages, the Company’s current weighted average
interest rate is 2.5 percent.
2016 Outlook
As previously communicated, the Company does not intend to
provide a forward-looking outlook for 2016.
Investor Presentation
An updated copy of the investor presentation is available under
the Investor Relations section of the Company’s website at
www.lasallehotels.com. This presentation includes new case studies.
The previous case studies included in our 2014 Investor Day
presentation and in our previous 2015 investor presentation are
available on the Company’s website as well.
Earnings Call
The Company will conduct its quarterly conference call on
Friday, February 19, 2016 at 10:00 AM eastern time. To participate
in the conference call, please dial (800) 474-8920.
Additionally, a live webcast of the conference call will be
available through the Company’s website. A replay of the conference
call webcast will also be archived and available online through the
Investor Relations section of the Company’s website.
LaSalle Hotel Properties is a leading multi-operator real estate
investment trust. The Company owns 47 hotels and a mezzanine loan
secured by two hotels in Santa Monica, California. The properties
are upscale, full-service hotels, totaling more than 12,000 guest
rooms in 14 markets in 10 states and the District of Columbia. The
Company focuses on owning, redeveloping and repositioning upscale,
full-service hotels located in urban, resort and convention
markets. LaSalle Hotel Properties seeks to grow through strategic
relationships with premier lodging companies, including Westin
Hotels and Resorts, Hilton Hotels Corporation, Outrigger Lodging
Services, Noble House Hotels & Resorts, Hyatt Hotels
Corporation, Benchmark Hospitality, White Lodging Services
Corporation, Commune Hotels and Resorts, Destination Hotels,
Davidson Hotel Company, the Kimpton Hotel & Restaurant Group,
Accor, HEI Hotels & Resorts, JRK Hotel Group, Inc., Viceroy
Hotel Group, Highgate Hotels and Access Hotels & Resorts.
This press release, together with other statements and
information publicly disseminated by the Company, contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends
such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and includes this
statement for purposes of complying with these safe harbor
provisions. Forward-looking statements, which are based on certain
assumptions and describe the Company's future plans, strategies and
expectations, are generally identifiable by use of the words
“will,” "believe," "expect," "intend," "anticipate," "estimate,"
"project" or similar expressions. Forward-looking statements in
this press release include, among others, statements about the
Company’s operating environment, renovation projects and certain
debt maturities. You should not rely on forward-looking statements
since they involve known and unknown risks, uncertainties and other
factors that are, in some cases, beyond the Company's control and
which could materially affect actual results, performances or
achievements. Factors that may cause actual results to differ
materially from current expectations include, but are not limited
to, (i) the Company’s dependence on third-party managers of its
hotels, including its inability to implement strategic business
decisions directly, (ii) risks associated with the hotel industry,
including competition, increases in wages, energy costs and other
operating costs, actual or threatened terrorist attacks, downturns
in general and local economic conditions and cancellation of or
delays in the completion of anticipated demand generators, (iii)
the availability and terms of financing and capital and the general
volatility of securities markets, (iv) risks associated with the
real estate industry, including environmental contamination and
costs of complying with the Americans with Disabilities Act and
similar laws, (v) interest rate increases, (vi) the possible
failure of the Company to qualify as a REIT and the risk of changes
in laws affecting REITs, (vii) the possibility of uninsured losses,
(viii) risks associated with redevelopment and repositioning
projects, including delays and cost overruns and (ix) the risk
factors discussed in the Company’s Annual Report on Form 10-K as
updated in its Quarterly Reports. Accordingly, there is no
assurance that the Company's expectations will be realized. Except
as otherwise required by the federal securities laws, the Company
disclaims any obligation or undertaking to publicly release any
updates or revisions to any forward-looking statement contained
herein (or elsewhere) to reflect any change in the Company’s
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
For additional information or to receive press releases via
e-mail, please visit our website at www.lasallehotels.com.
LASALLE HOTEL PROPERTIES
Consolidated Statements of Operations
and Comprehensive Income
(in thousands, except share data)
(unaudited)
For the three months ended
For the year ended December 31,
December 31, 2015 2014
2015 2014 Revenues: Hotel
operating revenues: Room $ 202,492 $ 186,096 $ 849,523 $ 773,801
Food and beverage 69,203 63,735 274,286 253,656 Other operating
department 20,733 17,895 84,782
74,000 Total hotel operating revenues 292,428
267,726 1,208,591 1,101,457 Other income 2,257
2,081 7,993 8,321 Total revenues
294,685 269,807 1,216,584
1,109,778
Expenses: Hotel operating expenses:
Room 54,942 49,457 215,944 196,952 Food and beverage 47,614 45,700
190,069 183,530 Other direct 3,707 5,300 17,514 23,800 Other
indirect 74,055 64,584 301,004
264,508 Total hotel operating expenses 180,318
165,041 724,531 668,790 Depreciation and amortization 45,853 39,148
180,855 155,035 Real estate taxes, personal property taxes and
insurance 16,107 14,595 65,438 57,805 Ground rent 3,912 3,648
16,076 14,667 General and administrative 6,256 6,028 25,197 23,832
Acquisition transaction costs 0 528 499 2,379 Other expenses
4,472 539 17,225 7,369
Total operating expenses 256,918
229,527 1,029,821 929,877
Operating income 37,767 40,280 186,763 179,901 Interest income
1,637 11 2,938 1,812 Interest expense (13,543 ) (13,585 ) (54,333 )
(56,628 ) Loss from extinguishment of debt (831 ) 0
(831 ) (2,487 ) Income before income tax
benefit (expense) 25,030 26,706 134,537 122,598 Income tax benefit
(expense) 1,508 (818 ) 1,292
(2,306 ) Income before gain on sale of properties 26,538
25,888 135,829 120,292 Gain on sale of properties 0
0 0 93,205 Net income
26,538 25,888 135,829
213,497 Net income attributable to noncontrolling
interests: Noncontrolling interests in consolidated entities (8 )
(8 ) (16 ) (16 ) Noncontrolling interests of common units in
Operating Partnership (32 ) (79 ) (261 )
(636 ) Net income attributable to noncontrolling interests
(40 ) (87 ) (277 ) (652 ) Net income
attributable to the Company 26,498 25,801 135,552 212,845
Distributions to preferred shareholders (3,042 ) (3,042 ) (12,169 )
(14,333 ) Issuance costs of redeemed preferred shares 0
0 0 (951 ) Net income
attributable to common shareholders $ 23,456 $ 22,759
$ 123,383 $ 197,561
LASALLE HOTEL PROPERTIES
Consolidated Statements of Operations
and Comprehensive Income - Continued
(in thousands, except share data)
(unaudited)
For the three months ended
For the year ended December 31,
December 31, 2015 2014
2015 2014 Earnings per Common Share
- Basic: Net income attributable to common shareholders
excluding amounts attributable to unvested restricted shares $ 0.21
$ 0.22 $ 1.09 $ 1.89
Earnings per
Common Share - Diluted: Net income attributable to common
shareholders excluding amounts attributable to unvested restricted
shares $ 0.21 $ 0.21 $ 1.09 $ 1.88
Weighted average number of common shares outstanding: Basic
112,633,429 105,550,157 112,685,235 104,188,785 Diluted 113,028,661
105,902,098 113,096,420 104,545,895
Comprehensive
Income: Net income $ 26,538 $ 25,888 $ 135,829 $ 213,497 Other
comprehensive income: Unrealized gain (loss) on interest rate
derivative instruments 2,935 (3,555 ) (5,682 ) (8,276 )
Reclassification adjustment for amounts recognized in net income
1,625 1,113 4,835
4,410 31,098 23,446 134,982 209,631 Comprehensive income
attributable to noncontrolling interests: Noncontrolling interests
in consolidated entities (8 ) (8 ) (16 ) (16 ) Noncontrolling
interests of common units in Operating Partnership (38 )
(72 ) (259 ) (625 ) Comprehensive income
attributable to noncontrolling interests (46 ) (80 )
(275 ) (641 ) Comprehensive income attributable to
the Company $ 31,052 $ 23,366 $ 134,707 $
208,990
LASALLE HOTEL PROPERTIES
FFO and EBITDA
(in thousands, except share/unit data)
(unaudited)
For the three months ended
For the year ended December 31,
December 31, 2015 2014
2015 2014 Net income attributable to
common shareholders $ 23,456 $ 22,759 $ 123,383 $ 197,561
Depreciation 45,724 39,012 180,346 154,585 Amortization of deferred
lease costs 75 86 294 347 Noncontrolling interests: Noncontrolling
interests in consolidated entities 8 8 16 16 Noncontrolling
interests of common units in Operating Partnership 32 79 261 636
Less: Gain on sale of properties 0 0
0 (93,205 )
FFO attributable to common
shareholders and unitholders $ 69,295 $
61,944 $ 304,300 $ 259,940
Pre-opening, management transition and severance expenses(1) 3,796
6 13,508 3,884 Preferred share issuance costs 0 0 0 951 Acquisition
transaction costs 0 528 499 2,379 Loss from extinguishment of debt
831 0 831 2,487 Non-cash ground rent 480 497 1,943 1,820 Mezzanine
loan discount amortization 0 0 0
(986 )
Adjusted FFO attributable to common
shareholders and unitholders(3) $ 74,402
$ 62,975 $ 321,081
$ 270,475 Weighted average number of common
shares and units outstanding: Basic 112,778,652 105,846,457
112,885,094 104,485,085 Diluted 113,173,884 106,198,398 113,296,279
104,842,195
FFO attributable to common shareholders and
unitholders per diluted share/unit $ 0.61 $ 0.58 $ 2.69 $ 2.48
Adjusted FFO attributable to common shareholders and unitholders
per diluted share/unit $ 0.66 $ 0.59 $ 2.83 $ 2.58
For the three months ended For the year ended
December 31, December 31, 2015 2014
2015 2014 Net income attributable to common
shareholders $ 23,456 $ 22,759 $ 123,383 $ 197,561 Interest expense
13,543 13,585 54,333 56,628 Loss from extinguishment of debt 831 0
831 2,487 Income tax (benefit) expense (1,508 ) 818 (1,292 ) 2,306
Depreciation and amortization 45,853 39,148 180,855 155,035
Noncontrolling interests: Noncontrolling interests in consolidated
entities 8 8 16 16 Noncontrolling interests of common units in
Operating Partnership 32 79 261 636 Distributions to preferred
shareholders 3,042 3,042 12,169
14,333
EBITDA $ 85,257
$ 79,439 $ 370,556 $
429,002 Pre-opening, management transition and severance
expenses(1) 3,796 6 13,508 3,884 Preferred share issuance costs 0 0
0 951 Acquisition transaction costs 0 528 499 2,379 Gain on sale of
properties 0 0 0 (93,205 ) Non-cash ground rent 480 497 1,943 1,820
Mezzanine loan discount amortization 0 0
0 (986 )
Adjusted
EBITDA(3) $ 89,533 $ 80,470
$ 386,506 $ 343,845 Corporate expense
7,233 6,762 29,850 29,056 Interest and other income (3,895 ) (1,405
) (10,930 ) (8,685 ) Pro forma hotel level adjustments, net(2)
(1,597 ) 4,564 (4,164 ) 15,900
Hotel EBITDA(3) $ 91,274
$ 90,391 $ 401,262
$ 380,116
(1) For the full year, pre-opening, management transition and
severance expenses include $6.1 million for Park Central New
York/WestHouse one-time disruption expenses that include guest
relocation expenses, clean up, legal, and payroll; $2.1 million for
Park Central San Francisco severance in the food and beverage
department and brand transition; and $2.7 million for management
transitions at three San Francisco properties.
(2) Pro forma to include the results of operations of the Park
Central San Francisco under previous ownership for the comparable
period in 2014, and exclude (i) the Hotel Viking and the Hilton
Alexandria Old Town, which were sold during 2014, (ii) The Marker
Waterfront Resort, which opened for business in December 2014, and
(iii) the Mason & Rook Hotel for the period the hotel was
closed for renovation in 2015 and the comparable period in
2014.
(3) For the three months ended December 31, 2015, union
disruption at Park Central New York/WestHouse decreased adjusted
EBITDA and hotel EBITDA by $2.0 million and adjusted FFO by $1.1
million. For the full year 2015, union disruption at Park Central
New York/WestHouse decreased adjusted EBITDA and hotel EBITDA by
$9.2 million and adjusted FFO by $5.3 million.
LASALLE HOTEL PROPERTIES
Hotel Operational Data
Schedule of Property Level Results -
Pro Forma(1)
(in thousands)
(unaudited)
For the three months ended
For the year ended December 31,
December 31, 2015 2014
2015 2014 Revenues: Room $
199,877 $ 200,047 $ 840,557 $ 827,499 Food and beverage 69,060
68,590 273,484 268,055 Other 20,166 20,374
83,355 80,013 Total hotel
revenues(2) 289,103 289,011
1,197,396 1,175,567
Expenses:
Room 54,371 54,017 214,072 215,434 Food and beverage 47,438 49,800
189,230 197,474 Other direct 3,641 5,451 17,139 24,480 General and
administrative 25,284 24,059 100,291 92,942 Sales and marketing
19,936 19,391 82,996 78,778 Management fees 10,008 9,298 39,439
39,541 Property operations and maintenance 9,843 9,880 39,137
39,320 Energy and utilities 6,930 7,167 30,120 30,111 Property
taxes 14,323 13,466 57,966 52,823 Other fixed expenses 6,055
6,091 25,744 24,548
Total hotel expenses 197,829 198,620
796,134 795,451
Hotel
EBITDA(2) $ 91,274 $
90,391 $ 401,262 $
380,116 Hotel EBITDA Margin(2)
31.6 % 31.3 % 33.5 %
32.3 %
(1) Pro forma to include the results of operations of the Park
Central San Francisco under previous ownership for the comparable
period in 2014, and exclude (i) the Hotel Viking and the Hilton
Alexandria Old Town, which were sold during 2014, (ii) The Marker
Waterfront Resort, which opened for business in December 2014, and
(iii) the Mason & Rook Hotel for the period the hotel was
closed for renovation in 2015 and the comparable period in
2014.
(2) For the three months ended December 31, 2015, union
disruption at Park Central New York/WestHouse decreased total hotel
revenues by $2.3 million and hotel EBITDA by $2.0 million, reducing
the Company’s hotel EBITDA margin by 42 basis points. For the full
year 2015, union disruption at Park Central New York/WestHouse
decreased total hotel revenues by $10.5 million and hotel EBITDA by
$9.2 million, reducing the Company’s hotel EBITDA margin by 47
basis points.
LASALLE HOTEL PROPERTIES
Statistical Data for the Hotels - Pro
Forma(1)
(unaudited)
For the three months ended
For the year ended December 31,
December 31, 2015 2014
2015 2014 Total Portfolio Occupancy
77.4 % 78.3 % 81.1 % 81.9 % Decrease (1.1 )% (0.9 )% ADR $ 237.76 $
235.70 $ 239.11 $ 233.60 Increase 0.9 % 2.4 %
RevPAR
$ 184.09 $ 184.52 $
193.95 $ 191.22 (Decrease) Increase
(0.2 )% 1.4 %
Note:
The following pro forma schedule shows operating data excluding
the impact of the disruption caused by the hotel workers’ union
during August, September, and October 2015 at Park Central New
York/WestHouse.
For the three
months ended For the year ended December 31
December 31 2015 2014 2015 2014
Total Portfolio Occupancy 77.8 % 78.3 % 81.8 % 81.9 % Decrease (0.6
)% (0.1 )% ADR $ 239.09 $ 235.70 $ 239.97 $ 233.60 Increase 1.4 %
2.7 %
RevPAR $ 186.13 $ 184.52
$ 196.22 $ 191.22 Increase
0.9 % 2.6 %
(1) Pro forma to include the results of operations of the Park
Central San Francisco under previous ownership for the comparable
period in 2014, and exclude (i) the Hotel Viking and the Hilton
Alexandria Old Town, which were sold during 2014, (ii) The Marker
Waterfront Resort, which opened for business in December 2014, and
(iii) the Mason & Rook Hotel for the period the hotel was
closed for renovation in 2015 and the comparable period in
2014.
LASALLE HOTEL PROPERTIES
Statistical Data for the Hotels - Pro
Forma(1) - Continued
(in millions)
(unaudited)
Prior Year Operating Data (Entire
Portfolio) - 2016 Comparable
First Quarter Second Quarter Third
Quarter Fourth Quarter Full Year 2015
2015 2015 2015 2015 Occupancy 74.2 %
87.0 % 85.4 % 77.5 % 81.1 % ADR $ 221.10 $ 252.14 $ 246.33 $ 238.40
$ 240.35 RevPAR $ 164.16 $ 219.31 $ 210.34 $ 184.83 $ 194.92
Total Hotel Revenues $ 256.3 $ 338.1 $ 325.6 $ 292.0 $ 1,212.0
Less: Total Hotel Expenses 189.7 208.8
207.5 199.2 805.2 Hotel
EBITDA $ 66.6 $ 129.3 $ 118.1 $ 92.8 $ 406.8 Hotel EBITDA Margin
26.0 % 38.3 % 36.3 % 31.8 % 33.6 %
(1) Pro forma to include the results of operations of the Park
Central San Francisco under previous ownership and The Marker
Waterfront Resort for the full year. Pro forma to exclude the Mason
& Rook Hotel during the first quarter and fourth quarter, for
comparable purposes, due to the hotel being closed for renovation
during the fourth quarter of 2015 and the first quarter of
2016.
LASALLE HOTEL PROPERTIES
RevPAR by Property - Pro Forma
(unaudited)
For the year ended December 31,
Property Detail 2014 2015 Westin
Copley Place $223.69 $241.04 The Liberty Hotel(6) $265.54 $273.16
Hyatt Regency Boston Harbor(5) $169.56 $183.18 Onyx Hotel $191.82
$211.04 Westin Michigan Avenue(5)(6) $146.42 $153.33 Hotel Chicago
$125.81 $153.78 Indianapolis Marriott Downtown $115.96 $117.12
Southernmost Beach Resort Key West $303.53 $322.37 The Marker
Waterfront Resort(1)(2) — $248.35 Chamberlain West Hollywood
$223.42 $225.52 Le Montrose Suite Hotel $198.89 $205.48 The Grafton
on Sunset(5) $139.81 $124.71 Le Parc Suite Hotel $192.47 $206.28
Hotel Amarano Burbank(6) $187.30 $180.68 Viceroy Santa Monica
$316.32 $325.10 Park Central Hotel New York/WestHouse Hotel New
York $223.93 $191.89 Park Central Hotel New York/WestHouse Hotel
New York Ex 2015 Union Impact $223.93 $220.79 The Roger $256.62
$243.17 Gild Hall $216.62 $214.65 Westin Philadelphia(5) $177.72
$180.75 Embassy Suites Philadelphia - Center City $149.98 $157.51
The Heathman Hotel(1) $161.58 $176.92 San Diego Paradise Point
Resort and Spa $162.22 $164.22 The Hilton San Diego Resort and Spa
$155.02 $168.30 L'Auberge Del Mar $266.30 $298.58 Hilton San Diego
Gaslamp Quarter(5) $176.12 $193.27 Hotel Solamar(6) $160.49 $167.37
Park Central San Francisco(1) $262.23 $251.11 The Marker San
Francisco $232.50 $225.20 Hotel Triton $194.46 $194.30 Harbor Court
Hotel $224.01 $227.94 Serrano Hotel $164.37 $173.35 Villa
Florence(5) $187.77 $177.25 Hotel Vitale(1) $321.16 $342.21
Chaminade Resort and Conference Center(6) $136.07 $134.09 Hotel
Deca $119.57 $125.21 Alexis Hotel $211.48 $218.20 Hotel Palomar,
Washington, DC(6) $181.49 $174.53 Topaz Hotel $160.04 $160.67 Hotel
Madera $175.30 $181.78 The Donovan $170.27 $178.94 Hotel Rouge
$156.92 $156.43 Hotel Helix(3)(6) $145.16 $147.73 Hotel George
$196.39 $211.60 Sofitel Washington, DC Lafayette Square(5) $248.68
$243.44 The Liaison Capitol Hill $154.84 $154.67 Lansdowne
Resort(6) $109.55 $113.00
LASALLE HOTEL PROPERTIES
RevPAR by Property - Pro Forma -
Continued
(unaudited)
For the year ended December 31,
Market Detail 2014
2015 Variance % Boston $219.84 $234.70 6.8% Chicago
$139.82 $153.47 9.8% Los Angeles $214.98 $217.67 1.3% New York
$228.26 $202.12 -11.5% New York Ex 2015 Union Impact $228.26
$223.64 -2.0% Philadelphia $163.99 $169.25 3.2% San Diego $171.45
$182.54 6.5% San Francisco $236.70 $233.67 -1.3% Seattle $159.43
$165.54 3.8% Washington, DC(7) $179.05 $179.64 0.3% Other(4)
$154.37 $160.19 3.8%
For the three months ended
December 31, 2015 Market Detail RevPAR Variance %
Boston 5.1% Chicago 4.9% Los Angeles 1.4% New York -9.0% New York
Ex 2015 Union Impact -1.9% Philadelphia 6.0% San Diego 8.8% San
Francisco -6.1% Seattle 0.3% Washington, DC(7) -4.6% Other(4) 6.6%
(1)
Pro forma to include operating results of the hotels under
previous ownership.
(2)
Includes full year 2015. 2014 is not applicable because the resort
opened for business in December 2014.
(3)
Hotel Helix closed for renovation on October 16, 2015 and will
re-open in 2016 as the Mason & Rook Hotel. RevPAR information
shown above is as of Q3 YTD for 2015 and 2014.
(4)
Other includes Indianapolis, IN, Portland, OR, Santa Cruz, CA,
Lansdowne, VA, and Southernmost Beach Resort Key West. The Marker
Waterfront Resort in Key West, FL is excluded from Other because
the resort opened in December 2014.
(5)
Denotes a hotel that was under renovation in Q4 2014 - Q1 2015.
(6)
Denotes a hotel that was under renovation in Q4 2015.
(7)
Washington, DC RevPAR excludes Hotel Helix because the hotel closed
for renovation on October 16, 2015.
LASALLE HOTEL PROPERTIES
Hotel EBITDA by Property - Pro
Forma
(in millions)
(unaudited)
Property Detail 2010 2011
2012 2013 2014 2015 Westin Copley Place
$21.3 $23.5 $24.4 $25.8 $28.7 $32.7 The Liberty Hotel(1) 6.1 9.6
13.3 15.8 17.2 18.2 Hyatt Regency Boston Harbor 6.2 6.7 7.3 7.7 9.3
11.1 Onyx Hotel 1.7 2.3 2.6 2.6 3.1 3.6 Westin Michigan Avenue 14.7
15.8 16.7 16.0 18.0 19.4 Hotel Chicago(5) 5.5 5.3 7.3 8.4 8.5 10.4
Indianapolis Marriott Downtown 14.2 12.4 14.7 14.2 14.4 16.3
Southernmost Beach Resort Key West(1) 9.0 10.4 10.8 14.1 17.6 19.9
The Marker Waterfront Resort(1)(2) — — — — — 4.8 Chaminade Resort
and Conference Center 3.3 3.6 3.7 4.3 4.7 5.0 Chamberlain West
Hollywood(1) 1.0 3.4 3.8 4.1 4.8 4.8 Le Montrose Suite Hotel 3.9
4.3 4.2 5.5 5.9 5.9 The Grafton on Sunset 1.9 2.2 2.2 2.0 1.5 0.9
Le Parc Suite Hotel 4.2 4.5 4.7 5.3 5.6 6.1 Hotel Amarano Burbank
2.0 2.4 3.3 4.2 4.7 4.4 Viceroy Santa Monica(1) 3.0 5.8 6.9 7.6 8.2
8.4 Park Central Hotel New York/WestHouse Hotel New York(1) 23.1
26.6 30.1 18.8 25.0 18.1 Park Central Hotel New York/WestHouse
Hotel New York Ex 2015 Union Impact(1) 23.1 26.6 30.1 18.8 25.0
27.3 The Roger(1) 6.2 6.4 5.0 7.5 8.2 7.3 Gild Hall 4.2 3.7 3.9 3.7
3.9 3.8 Westin Philadelphia(1) 9.0 10.8 11.9 10.9 11.8 10.8 Embassy
Suites Philadelphia - Center City(1) 5.0 5.4 6.6 6.9 7.3 8.0 The
Heathman Hotel(1) 1.5 1.6 1.9 2.4 3.0 5.7 San Diego Paradise Point
Resort and Spa 8.3 11.8 13.7 14.8 16.1 16.7 The Hilton San Diego
Resort and Spa 4.4 4.7 5.2 5.5 7.0 7.9 L'Auberge Del Mar(1) 4.6 5.4
5.6 7.7 8.1 9.9 Hilton San Diego Gaslamp Quarter 7.6 8.5 8.8 8.9
9.5 10.5 Hotel Solamar 5.2 6.3 6.5 6.3 6.5 7.4 Park Central San
Francisco(1)(4) 5.5 10.6 13.7 16.3 21.5 22.3 The Marker San
Francisco(1) 3.3 5.3 5.7 6.9 7.7 7.6 Hotel Triton(1) 1.5 2.5 2.7
3.6 4.8 4.9 Harbor Court Hotel(1) 2.7 4.0 3.7 4.9 5.8 6.1 Serrano
Hotel(1) 0.4 1.9 3.5 4.4 6.3 6.2 Villa Florence(1) 3.9 5.3 7.4 8.3
9.3 8.8 Hotel Vitale(1) 4.0 6.0 7.4 7.3 8.6 11.0 Hotel Deca 2.2 2.3
2.5 2.8 3.6 4.1 Alexis Hotel(5) 2.3 2.6 3.2 3.9 4.6 4.9 Hotel
Palomar, Washington, DC(1) 9.4 10.3 10.6 10.5 9.8 9.5 Topaz Hotel
2.0 1.9 2.1 2.0 1.9 2.0 Hotel Madera 2.1 2.3 2.2 2.0 2.1 2.5 The
Donovan 4.0 4.6 3.8 4.3 5.2 5.8 Hotel Rouge 2.4 2.9 2.9 2.8 2.8 3.1
Hotel Helix(3) 3.3 3.6 3.4 3.2 3.2 3.0 Hotel George 4.2 4.6 4.1 4.1
4.3 5.2 Sofitel Washington, DC Lafayette Square(1) 6.9 7.9 7.5 8.5
8.7 8.3 The Liaison Capitol Hill 7.6 9.3 9.1 8.6 4.4 6.9 Lansdowne
Resort(5) 8.5 8.0 8.8 9.7 10.6 9.5 Total Portfolio(6) $253.1 $299.3
$329.7 $345.3 $384.1 $405.1 Total Portfolio Ex 2015 Union Impact(6)
$253.1 $299.3 $329.7 $345.3 $384.1 $414.3
LASALLE HOTEL PROPERTIES
Hotel EBITDA by Property - Pro Forma -
Continued
(in millions)
(unaudited)
Market Detail 2010 2011
2012 2013 2014 2015 Boston $35.4 $42.0
$47.7 $51.8 $58.3 $65.6 Chicago 20.2 21.1 24.1 24.3 26.5 29.8 Los
Angeles 16.0 22.5 25.1 28.8 30.7 30.6 New York 33.5 36.8 39.1 30.0
37.1 29.2 New York Ex 2015 Union Impact 33.5 36.8 39.1 30.0 37.1
38.4 Philadelphia 14.0 16.3 18.5 17.8 19.1 18.8 San Diego 30.0 36.7
39.8 43.3 47.1 52.4 San Francisco 21.4 35.6 44.1 51.7 64.1 66.8
Seattle 4.5 4.9 5.7 6.7 8.3 9.0 Washington, DC 41.7 47.3 45.8 46.1
42.5 46.4 Other(7) 36.5 36.1 39.9 44.8 50.3 56.5 Total Portfolio(6)
$253.1 $299.3 $329.7 $345.3 $384.1 $405.1 Total Portfolio Ex 2015
Union Impact(6) $253.1 $299.3 $329.7 $345.3 $384.1 $414.3
(1)
Pro forma to include operating results of the hotels under
previous ownership.
(2)
Includes full year 2015. Prior periods are
not applicable because the resort opened for business in December
2014.
(3)
Hotel Helix closed for renovation on October 16, 2015 and will
re-open in 2016 as the Mason & Rook Hotel.
(4)
Park Central San Francisco real estate tax expense increased $1.9
million from 2014 to 2015 as a result of the increased real estate
tax assessment post-acquisition due to California’s Proposition 13.
(5)
EBITDA shown includes retail net operating income for Hotel Chicago
and Alexis Hotel and golf income at Lansdowne Resort.
(6)
Total portfolio excludes The Marker Waterfront Resort. Totals may
not foot due to rounding.
(7)
Other includes Indianapolis, IN, Portland, OR, Santa Cruz, CA,
Lansdowne, VA, and Southernmost Beach Resort Key West.
LASALLE HOTEL PROPERTIES
Hotel EBITDA
(in thousands)
(unaudited)
For the year ended December 31,
2010 2011 2012
2013 2014
2015 Net (loss) income attributable to common shareholders $
(24,793 ) $ 12,934 $ 45,146 $ 70,984 $ 197,561 $ 123,983 Interest
expense(1) 36,504 39,704 52,896 57,516 56,628 54,333 Loss from
extinguishment of debt 0 0 0 0 2,487 831 Income tax expense
(benefit)(1) 3,424 7,081 9,062 470 2,306 (1,892 ) Depreciation and
amortization(1) 110,676 111,282 124,363 143,991 155,035 180,855
Noncontrolling interests: Redeemable noncontrolling interest in
consolidated entity (191 ) (2 ) 0 0 0 0 Noncontrolling interests in
consolidated entities 0 0 0 17 16 16 Noncontrolling interests of
common units in Operating Partnership 0 1 281 303 636 261
Distributions to preferred shareholders 26,754
29,952 21,733 17,385
14,333 12,169
EBITDA $
152,374 $ 200,952 $ 253,481
$ 290,666 $ 429,002 $
370,556 Pre-opening, management transition and severance
expenses 2,612 579 1,447 6,420 3,884 13,508 Preferred share
issuance costs 0 731 4,417 1,566 951 0 Acquisition transaction
costs 3,003 2,571 4,498 2,646 2,379 499 Gain on sale of properties
(29,162 ) (760 ) 0 0 (93,205 ) 0 Impairment loss related to sale of
properties 36,129 0 0 0 0 0 Non-cash ground rent 0 347 454 1,305
1,820 1,943 Mezzanine loan discount amortization 0
0 (1,074 ) (2,524 ) (986 )
0
Adjusted EBITDA $ 164,956
$ 204,420 $ 263,223 $
300,079 $ 343,845 $ 386,506
Corporate expense 20,985 19,792 23,622 29,112 29,056 29,850
Interest and other income (5,899 ) (5,093 ) (9,212 ) (16,340 )
(8,685 ) (10,930 ) Hotel level adjustments, net (7,482 )
(2,228 ) (2,818 ) (1,082 ) (8,077 )
(4,164 )
Hotel EBITDA as reported in respective year
$ 172,560 $ 216,891 $
274,815 $ 311,769 $ 356,139
$ 401,262 Acquisitions and dispositions
adjustments 78,059 80,232 51,529 30,095 24,549 1,437 Non-hotel
other income adjustments 2,503 2,164 3,362 3,423 3,383 2,382
Hotel
EBITDA Pro Forma - all properties owned as of December 31, 2015
including prior to ownership $ 253,122
$ 299,287 $ 329,706
$ 345,287 $ 384,071
$ 405,081
(1) Includes amounts from discontinued operations.
Non-GAAP Financial Measures
FFO, EBITDA and Hotel EBITDA
The Company considers the non-GAAP measures of FFO (including
FFO per share/unit), EBITDA and hotel EBITDA to be key supplemental
measures of the Company's performance and should be considered
along with, but not as alternatives to, net income or loss as a
measure of the Company's operating performance. Historical cost
accounting for real estate assets implicitly assumes that the value
of real estate assets diminishes predictably over time. Since real
estate values instead have historically risen or fallen with market
conditions, most real estate industry investors consider FFO,
EBITDA and hotel EBITDA to be helpful in evaluating a real estate
company's operations.
The White Paper on FFO approved by NAREIT in April 2002, as
revised in 2011, defines FFO as net income or loss (computed in
accordance with GAAP), excluding gains or losses from sales of
properties and items classified by GAAP as extraordinary, plus real
estate-related depreciation and amortization and impairment
writedowns, and after comparable adjustments for the Company's
portion of these items related to unconsolidated entities and joint
ventures. The Company computes FFO consistent with standards
established by NAREIT, which may not be comparable to FFO reported
by other REITs that do not define the term in accordance with the
current NAREIT definition or that interpret the current NAREIT
definition differently than the Company.
With respect to FFO, the Company believes that excluding the
effect of extraordinary items, real estate-related depreciation and
amortization and impairments, and the portion of these items
related to unconsolidated entities, all of which are based on
historical cost accounting and which may be of limited significance
in evaluating current performance, can facilitate comparisons of
operating performance between periods and between REITs, even
though FFO does not represent an amount that accrues directly to
common shareholders. However, FFO may not be helpful when comparing
the Company to non-REITs.
With respect to EBITDA, the Company believes that excluding the
effect of non-operating expenses and non-cash charges, and the
portion of these items related to unconsolidated entities, all of
which are also based on historical cost accounting and may be of
limited significance in evaluating current performance, can help
eliminate the accounting effects of depreciation and amortization,
and financing decisions and facilitate comparisons of core
operating profitability between periods and between REITs, even
though EBITDA also does not represent an amount that accrues
directly to common shareholders.
With respect to hotel EBITDA, the Company believes that
excluding the effect of corporate-level expenses, non-cash items,
and the portion of these items related to unconsolidated entities,
provides a more complete understanding of the operating results
over which individual hotels and operators have direct control. The
Company believes property-level results provide investors with
supplemental information on the ongoing operational performance of
its hotels and effectiveness of the third-party management
companies operating its business on a property-level basis.
FFO, EBITDA and hotel EBITDA do not represent cash generated
from operating activities as determined by GAAP and should not be
considered as alternatives to net income or loss, cash flows from
operations or any other operating performance measure prescribed by
GAAP. FFO, EBITDA and hotel EBITDA are not measures of the
Company's liquidity, nor are FFO, EBITDA and hotel EBITDA
indicative of funds available to fund the Company's cash needs,
including its ability to make cash distributions. These
measurements do not reflect cash expenditures for long-term assets
and other items that have been and will be incurred. FFO, EBITDA
and hotel EBITDA may include funds that may not be available for
management's discretionary use due to functional requirements to
conserve funds for capital expenditures, property acquisitions, and
other commitments and uncertainties. To compensate for this,
management considers the impact of these excluded items to the
extent they are material to operating decisions or the evaluation
of the Company's operating performance.
Adjusted FFO and Adjusted EBITDA
The Company presents adjusted FFO (including adjusted FFO per
share/unit) and adjusted EBITDA, which adjusts for certain
additional items including gains on sale of property and impairment
losses (to the extent included in EBITDA), acquisition transaction
costs, costs associated with the departure of executive officers,
costs associated with the recognition of issuance costs related to
the calling of preferred shares and certain other items. The
Company excludes these items as it believes it allows for
meaningful comparisons with other REITs and between periods and is
more indicative of the ongoing performance of its assets. As with
FFO, EBITDA, and hotel EBITDA, the Company’s calculation of
adjusted FFO and adjusted EBITDA may be different from similar
adjusted measures calculated by other REITs.
Adjustments for Union Disruption at PCNY/WH
In addition, the Company has presented adjusted FFO (including
adjusted FFO per share/unit), adjusted EBITDA and hotel EBITDA
excluding the impact of the union disruption at the PCNY/WH in
August, September, and October 2015, which is a non-recurring item
that the Company does not believe is reasonably likely to recur
within two years. The Company estimates the negative impact of the
disruption based on the PCNY/WH actual results for August,
September, and October 2015 versus their forecast for that period
as of August 1, 2015.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160218006621/en/
LaSalle Hotel PropertiesBruce A. Riggins or Max D.
Leinweber301/941-1500
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